economics

Formulas built in myth
In the history of ideas, strong images like clocks or markets have helped, and hindered, thinking
Mary Midgley The Guardian, Saturday 15 August 2009

http://www.guardian.co.uk/commentisfree/belief/2009/aug/15/einstein-darwin-mary-midgley

[click to continue...]

Troubled Cuba Mulls ‘A Different Kind’ Of Socialism
[click to continue...]

How Bad Will the Economy Get? Really, Really Bad
By Thomas Greco, Jr., AlterNet
Posted on July 14, 2009, Printed on July 14, 2009

http://www.alternet.org/story/141281/

Historically, every financial and economic crisis has been used to
further centralize power and concentrate wealth. This one is no
different, and in fact the moves being promoted by the Obama
administration and the central banks of the Western powers will take the
whole world to the pinnacle of financial despotism — unless enough
people wake up and claim their own “money power.” [click to continue...]

http://www.marxmail.org/msg64557.html

… have completed adding Hilferding’s ‘Finance Capital’ to the Marxist Internet Archive.

http://www.marxists.org/archive/hilferding/1910/finkap/index.htm

The archive also carries Kautsky’s review of the book:

http://www.marxists.org/archive/kautsky/1911/xx/finance.htm

… Kautsky’s article on Hilferding’s mistake on money (translated by MIAer Daniel Guido) …

http://www.marxists.org/archive/kautsky/1912/xx/gpcc.htm

… and Lenin’s notes on the book:

http://www.marxists.org/archive/lenin/works/1916/ni-theta/hilferd.htm

Happy Bastille Day reading …

Can We Transform the Auto-Industrial Society?
By Emma Rothschild
The cataclysm of the American automobile industry has been an odd combination, so far, of immediate and historical anxieties. The government loan of $13.4 billion to General Motors and Chrysler in December 2008 was presented by the outgoing administration as an unsolicited gift, lest a “disorderly liquidation of American auto companies” should “leave the next President to confront the demise of a major American industry in his first days of office.” It was restricted explicitly to the very short term: “The firms must use these funds to become financially viable…. In the event that firms have not attained viability by March 31, 2009, the loan will be called.”[1]

But there are also intimations of the deep past and the distant future. The present and impending disorder of the automobile companies is a reminder, even more than the decline of the housing and banking industries, of the desolation of the Great Depression. It is a reminder, too, of economic history, or of the rise and decline of industrial destinies. When the listing of the “Fortune 500″ began in 1955, General Motors was the largest American corporation, and it was one of the three largest, measured in revenues, every year until 2007.[2] GM was the “largest industrial corporation in the world,” in its own description of 1989, and it was engaged, at the time, in “the most massive reindustrialization program ever attempted.”[3] It was an incarnation of American economic change, as a GM vice-president suggested during the earlier automotive crisis of 1973: “To say that a company that has successfully grown over a period of 65 years—a period marked by two world wars and a major economic depression—will suddenly be unable to adapt to the changing challenge…flies in the face of common sense”; it “denies history.”[4]

Our Epistemological Depression
By Jerry Z. Muller
Major recessions are characterized by something novel. Opacity and pseudo-objectivity created the crisis today.

The history of socialism is the history of failure—and so is the history of capitalism, but in a different sense. For the history of socialism is one of fundamental failure, a failure to provide incentives and an inability to coordinate information about supply and effective demand. The history of capitalism, by contrast, is the history of dialectical failure: it is a history of the creation of new institutions and practices that may be successful, even transformative for a while, but which eventually prove dysfunctional, either because their intrinsic weaknesses become more evident over time or because of a change in external circumstances. Historically, these institutional failures have led to two reactions. They lead to governmental attempts to reform corporate and financial institutions, through changes in law and regulation (such as limited liability laws, creation of the FDIC, the SEC, etc.). They also lead market institutions to reform themselves, as investors and managers learn what forms of organization and which practices are dysfunctional. The history of capitalism, then, is the history of success through dialectical failure.

History rarely repeats itself. There are some standard patterns in economic recessions, but major recessions are characterized by something novel. If only this were not the case: economists have devoted a great deal of attention to learning the lessons of the Great Depression that began in 1929, not least Ben Bernanke. As a result, we are unlikely to make the errors of monetary policy made by the Fed in that era (of tightening money when it should have been loosened); or the errors of fiscal policy made by the Treasury (such as raising taxes when they should have been lowered); or the errors of ideological tone made during the 1930s, when anticapitalist rhetoric frightened many potential investors from making new investments. In all of these respects, we have learned from the past.